MEG Energy, others could benefit from OPEC cut
FP says MEG Energy, others could benefit from OPEC cut
2016-11-24 09:40 ET - In the News
Also In the News (C-CJ) Cardinal Energy Ltd
Also In the News (C-IMO) Imperial Oil Ltd
Also In the News (C-SGY) Surge Energy Inc
The Financial Post reports in its Thursday edition that Macquarie Capital analysts project OPEC will cut cumulative oil output at a meeting in Vienna next week at 60 per cent, which would have major implications for Canadian energy companies. The Post's Geoffrey Morgan writes that Macquarie analysts are highlighting how energy companies' financial positions could rise or fall depending on whether OPEC reaches a decision Nov. 30 to cut production. Macquarie's analysis shows oil sands producers MEG Energy and Imperial Oil were highly sensitive to swings in the price of oil, and their funds flow per share numbers could benefit most substantially from an OPEC cut. The bank also picked Surge Energy and Cardinal Energy as domestic companies that could benefit. OPEC has been producing at record volumes since 2014, which has caused the price of oil to collapse and remain low for more than two years. If the cartel members fail to reach a deal, Macquarie analysts say there would likely be a "material pullback" for crude oil, causing the commodity to drop below $40 (U.S.) per barrel. If OPEC members agree to material cuts, Macquarie says crude oil prices would rise toward $60 (U.S.) per barrel, from $48.12 (U.S.).